Before concluding that the “CRA does not intend to adopt a permissive administrative position permitting a s. 83(2) election where there is a s. 84.1 deemed dividend payable by a private corporation to a person other than a shareholder of the corporation, CRA stated:
2002-0128955 … stated that the Department of Finance was informed that the wording of subsection 84(7) could be interpreted as contradicting our position that an election under subsection 83(2) could not be made in respect of a deemed dividend paid under paragraph 84.1(1)(b) to a person who was not a shareholder of the corporation.